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New Insurance Laws Help Cover Grown Children Living At Home

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By Steve Rosen McClatchy Newspapers

The Tampa Tribune

Published: June 22, 2008

KANSAS CITY, Mo. - Finally, an accelerating trend in health care insurance that's good news for many parents.

More than two dozen states including Florida, have signed into law or recently passed legislation that generally requires employer health care plans to continue to provide coverage for a longer time to adult dependent children still living at home.

Children typically lose health care coverage with a parent's plan on their 19th birthday, though full-time college students can remain on a policy generally until graduation. When children get the boot from the plan, it can touch off an anxious scramble for often-expensive replacement coverage, especially if it involves federal-mandated COBRA insurance.

Although the legislative specifics vary, many states in the past three years have pushed the health care coverage cut-off age for adult dependent children to 25.

Florida mandates coverage for dependants until age 25, but this year also required health insurers to offer extended coverage to age 30 if they meet certain restrictions. The child must be unmarried and without dependents, live in Florida or be a student and have no separate health insurance.

Given the complexity of our health care system, many parents are probably unaware of these legislative changes and what it could mean to their children who are just starting out on their own.

The reforms are aimed at helping some of the nation's 45 million people who don't have health insurance. Young adults, ages 19 to 29, are considered the fastest growing part of the uninsured population, according to a recently released Commonwealth Fund study. Only 41 percent were insured all of 2007, the study said.
Many young adults don't have health care coverage because they are unemployed or are in a job with no benefits. In addition, rising premium costs make insurance less of a priority to a relatively healthy part of the population. In many cases, 20-something adults are gambling their invincibility.

Even if you have younger children, keep an eye on this health insurance trend. Down the road, it could have implications for your children on their educational and career choices. For example, will a college degree translate into a ready job with health care benefits? It could become a factor in where you choose to live; a state that extends dependent coverage to your children for a few years beyond college as opposed to a state that doesn't.

Some of the laws extending coverage age allow insurers to charge extra premiums, but for the most part, there should be little change in the cost of keeping an adult child on the plan a few years longer.

"Adult children are probably the least expensive to cover," said Ed Fensholt, senior vice president and director of compliance services at Lockton Benefit Group in Kansas City.

What about families whose health plan is self-insured - that is, where the insurance is financed by the employer as opposed to plans in which the employer buys coverage from an insurance company?

Self-insured plans, which are favored by many larger companies, in general are not covered by the changes in dependent cutoff dates because they are subjected to federal rules under the 1974 Employee Retirement Income Security Act.

Fensholt is not surprised by the dependency coverage push and predicts the number of states extending it will accelerate.

Although the coverage reform won't be enough to solve all the problems of the nation's uninsured, it at least provides a safety net extension for many young adults until they can purchase coverage.

"As a parent, I worry about my kids getting hurt or requiring medical attention and not having insurance," Fensholt said. "Here now is a decision I can remove from their control and have peace of mind."

A final thought: I recommend parents talk to their high school or college-age children about the importance of earning a degree or learning a trade that will translate into immediate employment - with health benefits. The risk and cost of doing without insurance is just too great. Perhaps not what your children want to hear, but it's what they need to hear.

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